The president of the Israel Manufacturers Association told an audience of American businessmen today that the economy of the occupied Arab territories was moving toward integration with Israel’s economy. Zalman Susayeff, addressing a luncheon of the American-Israel Chamber of Commerce and Industry, said that large amounts of Israel-made goods such as textiles, furniture and plastics were purchased in the occupied territories and that the “new territories export to Jordan and other countries.” He added that about four percent of the total work force now employed in Israeli industry is from the occupied areas.

Mr. Susayeff said the purchases of Israeli goods by the Arabs accounted in part for the increased productivity of Israel’s industry. Other factors, he said, were increased exports, defense needs and increased consumption. He noted that Arab workers in Arab industries in the occupied territories increase three-fold during the year. Mr. Susayeff, who was deputy minister of commerce and industry from 1953-1955, reported that Israel’s exports had increased 11-fold since 1955. Industrial production in 1968 rose by 28 percent and some $500 million in comparison with 1967. Mr. Susayeff said Israelis expected a rise in industrial production of 18 percent in 1969.